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IP Newsflash March 2009: Appeals Court Decision Opens Way for Significant Patent Rule Changes


On March 20, 2009, the Court of Appeals for the Federal Circuit (CAFC) issued a ruling that paves the way for the U.S. Patent & Trademark Office (USPTO) to implement new patent prosecution rules that were originally supposed to have gone into effect in late 2007. These rules, if and when implemented, are expected to have a significant impact on patent applicants and the way that patents are obtained.

In 2007, the USPTO attempted to implement controversial new rules for patent practice that would significantly affect patent strategy and the overall patent system. These rules would impose, among other things, limits on the number of claims in patent applications, as well as limits on the number of continuation applications and requests for continued examination (RCEs) that can be filed in a family of related applications. (For an in-depth analysis of the proposed 2007 rules, click the "Download PDF" link to the left). The USPTO has argued that the rules are necessary to streamline its processes, curb perceived abuses in continuation application practice, and clear a growing backlog of unexamined applications. Practically, however, for most patent applicants, the rules impose significant procedural and economic hurdles to pursuing patent applications (although there is a potential loophole, discussed below). It is important now, more than ever, to have a plan or strategy to protect your intellectual property.

As we reported previously, a challenge to the proposed rules was brought in late 2007, by GlaxoSmithCline PLC and an individual inventor, Triantafyllos Tafas, both of which expressed great concern about the potential negative effects of the rules on their businesses and ability to obtain patents. Based on this challenge, these new rules were blocked in April 2008, by the District Court for the Eastern District of Virginia, which held that the rules exceeded the USPTO’s rulemaking authority. However, on March 20, 2009, the CAFC vacated-in-part the District Court’s ruling, and held that aside from the limits on continuation applications, the rules were “within the scope of the USPTO’s rulemaking authority.” Tafas v. Doll, 31(Fed. Cir. 2009, 08-1352). The case has been sent back to the District Court for further proceedings to determine if any of the upheld rules should be blocked on other grounds that were not fully considered or argued previously at the District Court level.

Although the CAFC remanded the case (likely making its decision only temporary), the USPTO is free in the meantime to implement an updated version of the rules (without a limit on the number of continuation applications), if it so chooses. As of this writing, however, there is no formal implementation date for any of the new rules. But, the CAFC’s ruling does provide an insight as to how the rules might be finally adjudicated and subsequently implemented. The following summarizes the CAFC’s decision on the rules and the potential impact of each:

  • Continuation Applications (Rule 78) - The CAFC decided that the rule limiting the number of continuation applications conflicts with § 120 of the Patent Act, which entitles a patent application to claim priority to a prior-filed application. Accordingly, an applicant remains free to file as many continuation applications in an application family as desired. By striking down this rule, the CAFC seems to have created a loophole around the remainder of the rules, as an applicant can file several continuation applications to cover varying aspects of its technology or to keep a pending case alive. However, filing multiple continuations may cause greater patent portfolio complexity, require more upfront planning and portfolio management, and increase costs.
  • Requests for Continued Examination (RCEs) (Rule 114) - This rule limits the number of RCEs that an applicant can file in a family of related patent applications unless the applicant can show “that the amendment, argument, or evidence sought to be entered could not have been submitted prior to the close of prosecution of the application.” 37 C.F.R. § 1.114(g). The USPTO has discretion whether to grant such a petition. The CAFC felt that, because this rule does not implicate § 120 of the Patent Act, it is procedural and thus within the USPTO’s rulemaking authority. Since RCEs have been historically needed to continue negotiations between applicants and the USPTO over patent claims, the practical effect of this rule will be to increase the number of appeals or continuations that an applicant will be forced to file.
  • Claim Number Limits (Rules 75 and 265) - For any application that includes more than 5 independent claims or 25 total claims, an applicant is required to file an examination support document (ESD). The ESD provisions require an applicant to conduct a preexamination search of the prior art, provide a list of the most relevant references, identify which limitations are disclosed by each reference, explain how each independent claim is patentable over the references, and show where in the application specification each limitation is disclosed. Id. § 1.265(a). Essentially, this rule requires a patent applicant to do the USPTO’s job for it. Aside from the extra work and associated cost of preparation, an ESD has other negative implications as well – in particular, it requires an applicant to go on record in characterizing both its own invention and the prior art, before the USPTO examiner makes any rulings or characterizations during examination. Based on the onerous requirements and risks associated with an ESD, both large and small companies are likely to keep patent applications within the 5/25 limit for many inventions.

The bottom line regarding these rules is that, if the CAFC’s decision stands, more strategy and planning will be required to effectively manage and implement a successful patent portfolio. Importantly, because the rule limiting continuation applications was struck down, most of the remaining rules can be side-stepped by strategically filing continuation and multiple, related applications. For example, to keep a pending application alive, an applicant could file a continuation application instead of an RCE. Or, to avoid the 5/25 claim limit rule, an applicant can file several applications with more limited numbers of claims instead of one large application with many claims. Filing many applications and continuations may cause a delay in prosecution and potentially create additional expense, but it is also a way to create a larger patent portfolio and build a greater arsenal of patents.

Notably, the CAFC did not rule on the issue of retroactivity (i.e. whether any of these rules will apply to currently-pending applications). Considering the uncertainty surrounding the retroactivity issue, but the widespread belief that any upheld rules will not be retroactive, it may be advisable to accelerate any potential patent filings before a final adjudication is rendered.

The next step regarding these rules is that either the District Court will conduct further review in accordance with the CAFC’s specific instructions (discussed above), or the CAFC will take the case up on en banc review (i.e. all CAFC judges will consider the case, rather than just a three-judge panel). Thus, for now, although the CAFC has indicated that most of these new USPTO rules are allowable, the rules are not formally in effect. We will keep you apprised of any further developments regarding the status of these rules as they occur.

If you have questions about how the new patent rules may specifically impact you or your company, please contact any of the following attorneys:

Daniel E. Sineway, Author (
John R. Harris, Editor (
Jack D. Todd, Editor (
Tim Tingkang Xia, Editor (
Jennifer P. Medlin, Editor (

NOTE: This article represents the views of the author and does not necessarily represent the views or positions of the firm or of any of its clients. The information contained herein is of a general nature and is not intended to provide legal advice to or address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that this information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on this information without appropriate professional advice after a thorough examination of the particular situation.

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